CLAR expands US logistics portfolio with first sale and leaseback acquisition for $150.3 million
Completed in 2022, the property lies in Whiteland, a submarket in southeast Indianapolis, Indiana. The building is a fully air-conditioned, single-storey logistics building with a GFA of 979,649 sq ft.
The manager plans to pay for the total acquisition cost through a combination of inside sources, divestment proceeds and/or existing debt centers, according to a Dec 17 news release.
The lengthy lease term of roughly 11 years with inbuilt rental fee rise of 3.5% per year will certainly give income security and reinforce the resilience of CLAR’s portfolio, states the manager.
Aside from this latest real estate in Indianapolis, CLAR’s logistics assets in the US rise in Kansas City, Chicago and Charleston.
The first-year net property income (NPI) yield of the recommended acquisition is about 7.6% pre-transaction prices and 7.4% post-transaction prices. The pro forma impact on the distribution per unit (DPU) for the financial year concluded Dec 31, 2023 is anticipated to be an improvement of roughly 0.019 Singapore cents, or a DPU accretion of 0.1%, thinking the suggested purchase was completed on Jan 1, 2023.
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The purchase will raise the worth of CLAR’s logistics assets under management (AUM) in the United States by 35.3% to some $587.5 million. With this acquisition, CLAR’s logistics footprint in the America will definitely broaden to 20 properties throughout four metros with an overall GFA of around 5.1 million sq ft.
The completely occupied building, with its weighted average lease to expiry (WALE) of about 11 years, will raise CLAR’s US accounts WALE from 4.2 years to 4.7 years on a pro forma basis.
After including transaction-related fees and expenditures of $1.7 million, together with a $1.5 million procurement charge paid to the manager, the complete purchase price are going to be $153.4 million.
CapitaLand Ascendas REIT (CLAR) has already submitted to acquire DHL Indianapolis Logistics Center, a Class A logistics real estate, from Exel Inc. d/b/a DHL Supply Chain (DHL U.S.A.) for $150.3 million. This is a 4.1% price cut to the independent market valuation of the property as at Jan 1, 2025.
William Tay, executive head and CEO of the manager, says: “DHL Indianapolis Logistics Center is a strategic fit with our existing profile … This is CLAR’s primary sale and leaseback procurement in the US and including this Class A logistics property, contemporary logistics investments will represent 42.3% of our United States logistics possessions under administration. With the lengthy rent in effect, this property is going to further enhance CLAR’s resilient revenue stream, and we anticipate both new real estates to add efficiently to our continued returns.”
Following the acquisition, DHL USA will become part of an extended leaseback till December 2035 of the real estate’s complete gross flooring area (GFA) with choices to renew for 2 extra five-year terms.
